Materiality assessment
Our risk management function and Enterprise Risk Management system drives a continuing risk assessment process to identify and rank our key risks and opportunities according to their probability and potential to materially impact our operations.
Risk management
We acknowledge the importance of continuous, robust materiality assessments to ensure that matters impacting upon the organisation’s ability to create value over the short, medium and long term are identified as elaborated upon in the Risk Management Report. Through these assessments we identify, quantify, prioritise and respond to important stakeholder issues, both positive and negative. A wide range of internal and external factors, encompassing regulatory, economic, social, political and global influences on the group, as well as legitimate stakeholder expectations, impact upon our daily business operations. These matters are considered at both the operational and board levels across the group, feeding into our strategic framework and the identification of risk impacts on the organisation.
The issues identified are quantitative and qualitative in nature and cover internal and external perspectives. Internal issues are identified by considering our policies and procedures, codes of conduct and business ethics, strategies, targets, risk management processes and employee engagement. Identification of external risks takes into account stakeholders’ interests and expectations, and matters identified in reporting initiative frameworks such as CDP’s Climate Change and Water responses, the JSE SRI Index requirements, the GRI requirements, the UN Global Compact Principles, the UN Guiding Principles on Business and Human Rights, as well as legal and regulatory requirements. These are compared and prioritised, based on internal and external assessments.
The materiality assessment process also guides the prioritisation of topics identified during the stakeholder engagement process. Engagement with employees, shareholders, customers, service providers, governments, non-governmental organisations and other interested persons leads to the identification of the primary issues governing these relationships and the topics of importance to our stakeholders generally. This ongoing engagement throughout the year is used as the basis for defining report content and prioritising business initiatives.
Business risks: The following risks were identified in the year under review as being the highest ranking strategic, financial and operational risks considered as potentially having the most material impact upon the group, if realised. Our Risk Management Report provides further information with regard to these risks.
KEY BUSINESS RISKS 2014/15
| Current residual rank* | 1(4) | 2(2) | 3(1) | 4(new) | 5(17) | 6(5) | 7(9) | 8(6) | 9(3) | 10(21) |
| Risk category | Market | Environ- ment |
Strategic | Financial and Treasury | Opera- tional |
Infra- structure |
Opera- tiona |
Strategic | Political | Opera- tiona |
| Priority risk | Price/ market risk |
Weather | Sugar imports | Interest rate exposure | Quality | Bulk water supply | Exceptional input cost increases | Cane supply | Country/ investment |
Factory utilisation and performance |
| Residual movement – 6 months |  |
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* – (#) denotes prior year